US Housing Market Remains Weak Amid Record Foreclosures

Strategic Insights -

The US housing market continued to face significant challenges in November, with sales of existing homes showing a slight increase despite being the second-lowest on record. The median home price dropped by 3.3% from the previous year, and the inventory of unsold homes remained high, indicating a prolonged market slowdown. Economists are cautious about the market's stabilization, citing the ongoing credit crunch and record-high foreclosures.

Key Takeaways:

  • Sales of existing homes increased by 0.4% in November, but remain at a seasonally adjusted annual rate of 5 million units, the second-lowest on record since 1999.
  • The median home price dropped by 3.3% from the previous year to $210,200, marking the fifth-biggest annual decline on record.
  • The inventory of unsold homes in November was 4.27 million homes, which would take 10.3 months to exhaust at the current sales pace.
  • A dip in 30-year US mortgage rates in November contributed to the slight increase in existing-home sales, according to the National Association of Realtors.
  • The housing market's severe slump has been exacerbated by a credit crunch, making it more difficult for people to secure financing to buy a home.
  • Foreclosures have soared to record highs, with a significant number of mortgages resetting in early 2008 expected to increase delinquencies and foreclosures.

Statistics:

  • Sales of existing homes increased by 0.4% in November from October.
  • The seasonally adjusted annual rate of sales was 5 million units.
  • The median home price dropped by 3.3% from the previous year to $210,200.
  • The inventory of unsold homes in November was 4.27 million homes.
  • It would take 10.3 months to exhaust the inventory at the current sales pace.

Sources:

  • National Association of Realtors
  • Weiss Research Inc.
  • BMO Nesbitt Burns Inc.
  • Associated Press